Blog
What Is A Mortgage?
The original phrase “mort gage” translates as “death pledge”! But as this video explains, a mortgage is a loan obtained to purchase real estate.
The “mortgage” itself is a lien – a legal claim on the home or property that secures the promise to pay the debt.
All mortgages have two features in common: principal and interest.
The principal is the amount you are borrowing which is “secured” by the lender’s claim on the property.
The interest, usually stated as the percentage rate is the additional amount paid for borrowing. Mortgage interest is ‘compounded’ – interest on interest, over time.
What’s Refunded If My Loan Is Higher Than My Estimate?
If the amount you pay at closing exceeds the amounts disclosed on the Loan Estimate – beyond tolerance limits for each category – the creditor must REFUND the excess to you no later than 60 calendar days after loan consummation.
For charges subject to a 10% cumulative tolerance fees greater than 10% of the Loan Estimate for the same charges must be refunded.
For fees paid for 3rd party services which the creditor did NOT permit you to shop the FULL amount over the estimate must be refunded.
For charges subject to ZERO tolerance including fees paid to the creditor mortgage broker or their affiliates any amount beyond the Loan Estimate must be refunded.
How Do I Begin The Process Of Buying A Home?
Remember these pointers from the video: start by thinking about your situation.
- Are you ready to buy a home?
- How much can you afford in a monthly mortgage payment?
- How much space do you need?
- What areas of town do you like?
After you answer these questions, make a “To Do” list and start doing casual research. Talk to friends and family, drive through neighborhoods, and look in the “Homes” section of the newspaper, or online.
How Do I Set The Price On My House?
While this video simplifies things to help you remember: your aim is to get the best price AND terms in your market during the period you’re selling.
Market conditions interest rates and competition all matter.
The price you want, and the price a buyer will pay are framed by those complex conditions So pricing isn’t completely predictable.
Other factors include:
- How your home compares to other homes for the same buyers
- The inventory of homes and the level of buyer demand
Your needs also affect negotiations – for example, if you must sell quickly – but the final price will be determined by the market not by your needs.
Buyers look at the same comparables and market conditions and they want to pay as little as possible while meeting their needs.
Remember that the price isn’t the entire deal – repairs, closing, points, appliances and other factors can all change the value you finally receive. Listen to your broker, stay informed, be patient if you can and make your best reasonable, unemotional decisions.
What Do Lenders Have To Tell You About Your Real Estate Loan?
Federal “disclosure” forms define the information that creditor businesses MUST provide to consumers applying for real estate loans.
As of Oct 1, 2015 lenders must provide TWO New “TRID” disclosure forms. for the most common kinds of real estate loans First, the Loan Estimate, which covers the key features, costs and risks of a mortgage loan.
For an approved loan this must be returned to the consumer within 3 business days of loan application. If the loan goes forward, the Closing Disclosure form, covering key transaction costs, must be delivered at least 3 business days before loan consummation.
How Can The FHA Assist Me In Buying A Home?
Remember these points from the video:the FHA works to make homeownership a possibility for more Americans. With the FHA, you don’t need perfect credit or a high-paying job to qualify for a loan. The FHA also makes loans more accessible by requiring smaller down payments than conventional loans.
In fact, an FHA down payment could be as little as a few months rent. And your monthly payments may not be much more than rent.